IBM, pharmaceutical firm sign US$1.7B IT contract

Pharmaceutical giant AstraZeneca PLC is to outsource its IT operations to IBM Corp. in a deal worth US$1.7 billion over seven years, the companies announced Friday.

Under the deal, IBM's Global Services division will run AstraZeneca's global IT infrastructure, performing a range of IT functions in support of the pharmaceutical divisions in 45 countries, said IBM spokeswoman Lorna Campbell.

The contract will involve the transfer of up to 1,200 AstraZeneca employees to IBM, mainly from AstraZeneca's offices in the US, UK and Sweden, Campbell said. No lay-offs are expected.

The agreement with AstraZeneca is the latest in a long line for IBM's growing Global Services division, which claims to be the world's largest IT outsourcing organization with reported revenue of US$33.2 billion in 2000, up from $4 billion ten years previously. IBM's Global Services European sector in particular has been very robust, though Campbell said she could not release specific European numbers.

The IT outsourcing/Web hosting market in Western Europe is set to grow from an estimated US$907 million in 2000 to more than $5 billion by 2004, according to a report published by market analysis company International Data Corp. (IDC). (IDC is owned by International Data Group Inc., the parent of the IDG News Service.)IBM, in Armonk, New York, can be reached at +1-914-765-1900 or at http://www.ibm.com/. AstraZeneca, in London, can be contacted at +44-20-7304-5000, or online at http://www.astrazeneca.com/.

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